Berneberg Bank: Even if the war continues, the European Central Bank can still cope with energy price shocks.

Berenberg Bank stated that if the Iran war continues for a few more weeks, the European Central Bank may be able to cope with this temporary inflation shock. However, even if the conflict persists and the economy stagnates due to energy price shocks, the European Central Bank will still find it difficult to raise interest rates. ECB President Lagarde may prioritize stabilizing the market by releasing intentions to control inflation expectations at this week's meeting. The next step is likely to be a rate hike, but this may have to wait until the second half of 2027, when higher wage growth will gradually force the European Central Bank to raise deposit rates from the current 2.0% to 3.0%.